At look @ Heads & Beds in: Custer County

1. At look @Heads & Beds in: Custer County Custer County Tourism Board February 25th, 2014 Updated May 12, 2014 Cindy Howard, Treasurer

2. Who? What? Where? When? & Why? • What/Where • A County Lodging Tax of 2% on all Taxable sales of Lodging in “Custer County” • When • Resolution No. 07-07 – adopted June 5, 2007 • Ballot Question Tuesday, November 6th, 2007 • Ran 4 times in the “official” newspaper, prior to election • Voters approved ballot question • Tax collections began Jan 1, 2008 • First collections not received until May, 2008 for Q1/08 • Ballot Question paid back (our ½ $2,148.67 - Road&Bridge)

3. Ballot Question • Shall Custer County Taxes be increased by a projected amount of $25,000 annually through the implementation of a two percent (2%) tourism lodging tax assessed on rooms or accommodations by any person or entity renting a motel, campground, or hotel or similar enterprise located in the county of Custerfor less than 30 consecutive days, pursuant to C.R.S. 30-11-107.5 beginning January 1, 2008 and by whatever amount future collections of such lodging tax total, the revenues from such tax to be used exclusively for advertising and marketing of local tourism, to be administered by a board of at least three persons from the tourism industry within the County of Custer appointed by the Commissioners of Custer County, which shall be to the extent feasible, to advertise and market tourism for the benefit of Custer County.

4. Who? • Who • All Lodging Vendors except FS Campgrounds • Motel • Hotel • B&B • Cabins • Vacation Homes • RV Parks & Commercial Campgrounds • Conference Centers, whether or not Tax-Exempt • All TAXABLE Customers of Lodging Vendors: • Any Consecutive Stay less than 30 days • Except NON-TAXABLE Customers

5. What is Tax Exempt? • The purchase is included under, and is part of, the regular religious or charitable functions and activities of the organization, or is purchased in a government capacity. • The transaction is billed directly to the organization and payment is made directly from organization funds. (Purchase of food or lodging by individuals do not qualify for the exemption even though the individual will be reimbursed by the organization or government). • The participants at the event have not and will not reimburse the organization in any way for the event such as by purchase of a ticket, payment of a registration fee, or by making an involuntary contribution. • ALL OF THE ABOVE STATEMENTS MUST BE TRUE FOR THE PURCHASE TO QUALIFY FOR TAX EXEMPTION. • $100 “Cash” Rule

7. Why? • To Collect revenue for additional Marketing in the county • Not a property tax or local sales tax on all sales • The CCMCC had a limited budget, although they were already doing the visitors guide, events calendar and sponsoring many events • EDC Goal of the Tourism & Marketing Group

8. EDC 2008! • Business and Community Dev. – Community Leader: Dee Hoag • Natural Resources – Community Leader: Robin Young • Human Resources – Community Leader: Kimberly Stein • Tourism and Marketing – Community Leader: Angie Arterburn

9. Lodging Tax 101: (a recap) • 2% County Tax on Lodging Sales • Governed by State Statue • also by CCTB By-Laws • Annual County Budget Process • Annual Fiscal Audit • Open Meetings – Sunshine Act • BOCC makes Appointments • CCTB Elects it’s own Officers

10. FUN FACTs & other things you might really need to know • Top 2 MOST important financial terms/acronyms in the lodging industry: • ADR – Average Daily Rate • NOT the Rack Rate! • After Discounts, Lower Rates for groups, weekly, etc. • OCC – Occupancy Rate • What percentage of your rooms were rented • Daily, Weekly, Monthly Annually. • The most important is the Annual Occupancy Rate!

11. Why? 3) Appraising what your business is worth: • Commercial Appraisals consist of: • 1) Market Approach: real sales comps! • 2) Cost Approach: (replacement cost – depreciation) • 3) Income Approach: • GIM: Gross Income Multiplier • Banks/SBA: @3.08 – 4.0 • Patel – 2.75

12. Why? • Lending to Lodgers is a Hard Sell! -Record Foreclosures -Sustained Economic Downturn -Proof of Income – last 3 years P&L’s! • Knowing what your sales trends are!

13. Got PMS?GDS? • PMS = Property Management System • Online Booking Engine (website) • Jack Rabbit – Colorado.com • GDS – Global Distribution • Very high Fees • 30% + leakage

14. Why? • CHLA tracks occupancy & follows trends

25. Colorado Occupancy

26. Colorado ADR

29. County Lodging Tax Collections:Cash basis Vs. Accrual

30. CASH BASIS

31. Accrual Basis

32. Measuring the increase! • $26,190 - $21,333 = + $4,857.00 • $4,857.00 / .02 (tax rate) = $242,850 of NEW taxable lodging sales in Custer County • This increase does not correlate to reports from local vendors; therefore it is likely NEW COMPLIANCE.

33. 2014 Budget

34. 2014 Budget